Are the days of cheap clothing in Western stores numbered? They would appear to be, if the following UK newspaper headlines are to be believed:

“The end of throwaway fashion could be in sight”, The Guardian, September 13, 2010;“Cheap clothes era to end as Primark warn customers prices will rise over cotton costs”, Metro, September 2010;“Next warns of higher clothes prices”, Daily Telegraph, September 15, 2010; and“Clothes prices up for first time in 18 years as cotton prices soar”, Daily Mail, October 1, 2010.

According to the UK Office for National Statistics, the annual rate of clothing and footwear inflation in September 2010 was 0.9%, representing the first price increase since 1992. Furthermore, prices rose by 6.4% between August and September, which was the largest increase for that period since records began. Warnings of impending price increases are not just confined to UK high street giants. The Swedish chain H&M has also announced that higher prices may be in store.

INTRODUCTION

WHAT LED TO LOW CLOTHING PRICES?

WHAT IS DRIVING THE PRICE INCREASES?

CAN CHINA CONTINUE TO BE A LOW COST SOURCE?

LIST OF FIGURES

Figure 1: Reviving the old silk routes: China's proposals for high speed rail routes across Asia and Europe